MexECON Blog

May Retail Sales Rise 0.2 Percent

Mexican retail sales rose by a seasonally-adjusted 0.2% in May, erasing part of their unrevised 0.3% decline in April.  On an unadjusted, constant-price basis, sales in May were up a healthy 4.1% from the same month one year earlier.  The retail subsectors posting the best year-over-year sales gains in May were on-line and catalogs; healthcare; and clothing, footwear, and textile goods.

At the wholesale level, May sales rose 1.0%, matching the revised gain in April and marking the fourth straight month of increases at 1.0% or better.  Wholesale sales in Mexico have now risen for eight straight months, and receipts in May were up 3.0% year-over-year.

The report was released today by INEGI, the official statistics agency.

Comment:  As I have been expecting, consumption spending in Mexico is continuing to get a boost from the steep drop in unemployment over the last year.  Consumers are also probably encouraged by recent signs of improvement in other sectors of the economy.  For Mexican consumers who rely on money sent back home by family members working in the United States, the on-going appreciation of the greenback means that every dollar they receive gives them many more pesos than just one year ago.  The acceleration in Mexican wholesale sales is a clear sign that even retailers have become more confident that consumer demand will remain strong.  (Otherwise, they would be reluctant to order more goods from their suppliers, out of fear of being stuck with excess inventories.)  The strength in retail and wholesale trade should help keep the overall economy growing moderately in the near term, though there is still some downside risk from a likely hike in U.S. interest rates later this year.

Patrick Fearon, CFA
Portfolio Manager

Wholesale Sales 1505

Retail Sales 1505

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